Elsewhere in The Playbook, we discuss some of the qualities to look for in an accountant for an emerging business. The article, “5 People You Must Have on Your Start-up Team,” appears in the Expansion section: it talks about the accountant’s role in conjunction with other key advisors: attorneys, bankers, insurance agents, and your business mentor.
Industry Expertise and Knowing How to Read the Numbers
In fact, the advisory role of your go-to accountant dovetails perfectly with his or her other major duties: helping you organize your bookkeeping and tax preparation. Accountants add value by knowing how much things should cost – and that varies from business to business. That’s why it’s important to find a CPA who is familiar with your industry. When trying to identify tax deductions, or track cash flows and inventory, it’s the details that matter. Someone who knows from experience what the numbers should look like will be an invaluable asset as you build your business.
To further narrow down your candidates, it’s a good idea to create a list of the specific kinds of advice and services you will require. For example:
- Find and document your tax deductions
- Set up systems to track and manage cash flow and inventory
- Prepare successful loan applications, including auditing services when required
- Decide when you need to raise or lower your prices—and by how much
Don’t Overlook Communication Styles
As you’re interviewing accountants, be sure to discuss their experience in each area, along with their fee for performing each service. In the course of these discussions, you will get a sense of different communication styles. Do you have a sense of rapport and mutual understanding? Do they use too much jargon, or maybe they’re too casual for you? Are they excited to work with entrepreneurs and do they “get” your business? Don’t underrate these issues just because they’re qualitative. Personal chemistry can often be the most important factor of all.
Experts say the best way to identify the CPA who’s right for your business is through word-of-mouth networking. Your other advisors will be important referral sources, and so will your colleagues, suppliers, and customers.